Order book puts CMA CGM in 2nd place by fleet size behind Maersk

FRENCH shipping line CMA CGM ordered five 15,000-TEU containerships from Jiangshan Shanghai in China in March for a reported US$130 million each

09 August 2019 - 19:00

FRENCH shipping line CMA CGM ordered five 15,000-TEU containerships from Jiangshan Shanghai in China in March for a reported US$130 million each. A further five mega ships - those 13,400 TEU or above - were order by the carrier from Hudong Zhonghua in China for $110 million each, with delivery scheduled to begin in 2021.

The price difference is accounted for by the different specifications. VesselsValue cargo analyst Guy Cooper told Container Shipping & Trade: 'Of these 10 vessels, five are LNG-powered and the other five have been fitted with hybrid scrubbers.'

The CMA CGM newbuilding brings the total number of ultra large containerships (ULCSs) on order to 66 vessels with a total capacity of 1.2 million TEU, VesselsValue data shows, reported London's Riviera Maritime Media. Indeed, the 66 mega ships on order are from only six owners: CMA CGM, Eastern Pacific Shipping, HMM, MSC, Shoei Kisen (Imabari, Japan) and Zodiac Maritime.

CMA CGM already had nine 22,000-TEU ULCSs on order before March 2019. The older order is spread between Shanghai Waigaoqiao Shipbuilding and Hudong Zhonghua.

Before the March order was placed, CMA CGM had the third-largest number of ULCSs worldwide, with 23 vessels for a combined capacity of 359,388 TEU. Including the new orders in China, the carrier rises to second place with a 13 per cent share of the fleet (36 ULCSs with a capacity of 581,244 TEU), behind Maersk Line's 19 per cent share of the fleet.

The CMA CGM ULCS orders represent a landmark. They were placed six months after the last reported ULCS newbuilding orders, when observers were starting to think the ULCS newbuilding spree was over.

The question emerges as to why CMA CGM chose that time to order more ULCSs? These vessels reflect a subtle shift in the strategy of CMA CGM and are important for reasons beyond the extra fleet capacity.

First, they represent a virtual sovereign agreement between France and China given that CMA CGM chief executive Rodolphe Saade sealed the deal with China State Shipbuilding Corporation in the presence of the French and Chinese presidents.

CMA CGM is also moving to mesh ever-closer the container shipping operations into a vertically integrated logistics business. There has been no explicit statement to this effect, however, its e-shipping portal and 15 other projects outside of the immediate assets on the water point in that direction.

But the biggest indicator is its decision to purchase shares in the IPO of Swiss logistics operation CEVA in 2018 for $934.1 million.

According to Alphaliner, CMA CGM's current debt obligations on current and new vessels, plus the acquisition of Containerships in Finland and other expenses could see its debt profile exceed $9.18 billion in 2018. On the plus side, the shipping company is introducing cost controls (cuts) of $1.5 billion under a programme called 'Agility'.

Maersk is the leader in terms of overall tonnage and capacity, with its fleet of ULCSs numbering 50 vessels with an average age of fours years old and combined capacity of 886,580 TEU. There are no new Maersk ULCSs on the orderbook.

In third position lies Cosco Shipping Lines with 33 live ULCSs. It is awaiting delivery of three 21,237-TEU newbuildings purchased from Oriental Fleet International. The Chinese state-owned operator has huge depth in logistics. According to shipping consultancy Drewry, Cosco is now the third-largest container terminal operator after the Port of Singapore Authority (PSA) and Hutchinson Ports.

Drewry reports that Cosco's terminal operations reached 46.1 million TEU in 2018, a year-on-year growth of 32.2 per cent compared to Hutchinson Ports with 46.7 million TEU in 2018, and leader PSA with 60.3 million TEU in 2018.

Mediterranean Shipping Company (MSC) has 21 live ULCSs and another nine mega ships on order. These nine 23,000-TEU vessels are to be delivered this year and next from Samsung and Daewoo. MSC is in the 2M alliance with Maersk and will be joined by HMM in 2020. This would create an alliance of 100 ULCSs. The second-largest ULCS sharing fleet will be the Ocean Alliance with 85 ULCSs.


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